A stitch in time saves nine. But in Essar Oil's case it has also brought in a Rs 269 crore windfall. The company is set to get the amount as claim against an 'advance loss of profit' cover, a policy provided by United India Insurance to protect corporates from the impact of disruption in work.

This is the first ALOP insurance claim being settled in the country and has come as a big relief to Essar Oil, promoted by the Ruias, which recently tied up funds for its Rs 8,000-crore refinery coming up at Vadinar in Gujarat. The company had taken the policy in 1996 for Rs 1,072 crore and paid a premium of Rs 27 crore.

Essar Oil filed the claim after the devastating cyclone of June 9, 1998, that lashed Gujarat's peninsular Kathiawad region at speeds of up to 190 kmph accompanied by four-metre- high tidal waves.

The company claimed compensation for loss of earnings resulting in loss in net profit from delays in the refinery's construction caused by the cyclone.

It also claimed compensation for physical damage to equipment and structures besides salaries and debt servicing charges for the period by which the project was delayed.

ABB Lumus, the engineering procurement contractors, had told the promoters that the project would be delayed by 10 months.

United India has now okayed payment of Rs 299 crore as final settlement of the claim after overseas reinsurers -Trust International and Munich Re -signed the contract with United India clearing the payment.